(Bloomberg) -- Romania is heading into another bout of tension after President Klaus Iohannis called for the prime minister to step down because of a spat over foreign policy and the budget.
Fighting between Iohannis and the ruling party has been a dominant feature of the European Union nation’s political scene since the Social Democrats swept to power in 2016. They’ve already switched prime ministers twice, and Premier Viorica Dancila’s fate is ultimately in the hands of party boss Liviu Dragnea, Romania’s de facto leader. She’s only been in her post since January.
“In the best interests of the country and not someone in particular, there’s a need for cooperation between the state institutions,” Iohannis said Friday. “The prime minister fails to understand that. She preferred to listen to orders from the party.”
The friction highlights the volatile nature of politics in the NATO member of 20 million people, which is set to host the EU’s rotating presidency next year as the U.K. officially splits from the bloc. While Iohannis can’t fire the prime minister -- that requires a vote of no-confidence in parliament, which the Social Democrats control -- the latest storm may be the starting gun for campaigning for next year’s presidential elections.
The spat broke out over Dancila’s refusal to discuss with the president a plan to relocate Romania’s embassy in Israel to Jerusalem, as well as the impact of fiscal policy on inflation. Iohannis said she’d turned the government into a “vulnerability,” making her “unfit” for the job.
Several Social Democrat officials accused Iohannis of picking the fight to boost his chances of winning a second term, vowing to stand by Dancila. The president, a former member of the opposition Liberal Party, has said he’ll probably seek re-election; the Social Democrats haven’t announced a candidate yet though polls suggest they have several who’re more trusted than the incumbent. Dragnea has a vote-rigging conviction that prevents him from taking public office.
While investors have grown used to political squabbling, the leu weakened for a second day, trading 0.1 percent lower against the euro after the president spoke. Iohannis has repeatedly criticized the government of late over sudden cabinet changes, attempts to change judiciary legislation and dent anti-corruption efforts.
“The crisis will now move to parliament and the Constitutional Court and it could even lead to the suspension of the president,” Cristian Pirvulescu, dean of Bucharest’s Political Science University, said by phone.
©2018 Bloomberg L.P.